True Corporation’s Naureen Quayum explains how new generations of investors will power up sustainable investing
NASA’s data shows July 22, 2024 was Earth’s hottest day on record. But global warming no longer correlates with a rise in investment focused on environmental, social and governance (ESG) criteria. While 993 ESG funds launched in 2023, the total dropped to 566 in 2023, and is on track to drop even further in 2024, with only 100 funds launched from January to May.
To understand the dilemmas surrounding ESG investing, we spoke to True Corporation’s Head of Investor Relations, Naureen Quayum. Ms. Naureen formerly led investor relations functions at dtac in Thailand and Grameenphone, Telenor’s Bangladesh unit. She has an expansive career rooted in corporate communications, strategy, transformation and marketing.
Asia’s New Generation of ESG Investors
Ms. Naureen doesn’t see Wall Street’s ESG retreat affecting Asia to the same degree. “The dynamics in the US and in Asia are very different. And I’ll tell you why ESG is becoming more and more important in our region. There is a new generation of conscious and aware leaders in authority who are making and influencing investment decisions. This generation isn’t just looking at the top line and bottom line, but also at a business’s impact on the planet and on society,” she said. “It will only get more important, as each new generation is increasingly concerned about making sustainable choices every day.”
Indeed, ESG bond issuances in Southeast Asia grew to US$5.1 billion in the first quarter of 2024, a 27.4% increase from last year. In a study by AXA Investment Managers (AXA IM), 39 per cent of investors in Asia said they hold ethical or ESG funds, compared to less than a quarter for investors in Europe. In the region, Thais were the most upbeat on the potential for ESG funds to beat the market, with 63% of respondents expecting ESG funds to outperform.
“ESG funds really started to gain traction in 2018—so it’s a relatively recent framework, which is not something that’s built into the DNA of companies yet. I would define it as an evolution of what used to be known as corporate social responsibility, or CSR. But whereas CSR was a checkbox item to show good behavior with no real accountability, ESG is a more rigorous framework to hold organizations accountable with consequences. It requires solid governance principles, which are critical to running a reputable company.”
A Need for Clarity
One such framework is the S&P 500’s Corporate Sustainability Assessment, which analyzes companies across 1,000 data points in the environmental, social, and governance dimensions. For six years in a row, True Corporation’s has ranked first in the telecommunications services industry, earning it a spot on the Dow Jones Sustainability Indices (DJSI). But investors find the many labels and certifications for ESG confusing.
“Despite growing awareness for ESG, it’s still just the beginning. Investors want more clarity and more standardization. We can’t claim that any one company is perfect and we all have a long way to go,” Ms. Naureen explained. “Moreover, ESG disclosure requirements for every industry and country varies according to what the pressing concern is, and the criteria must be adjusted to the local context.”
For telecommunications in Thailand, Ms. Naureen sees a strong focus on the environmental and social aspects of ESG: “A telecommunication company’s massive tower and network infrastructure nationwide triggers investors’ interest in what our plan is when it comes to green and renewable energy. There’s a high level of consciousness on the topic of climate action. That’s why we’ve set clear goals to become carbon neutral by 2030 and Net Zero by 2050. And we communicate our progress transparently and frequently.”
The other challenge for ESG’s consistency is consistency across industries. A fast-moving consumer goods business, for example, will face more pressure to curb single-use plastics than a telecommunications business. However, a telecommunications business will be held to much higher standards when it comes to the issue of cybersecurity and data privacy.
“Where I see more opportunities for standard benchmarks is in the governance dimension. A company with concrete policies in place addressing key issues such as child labor and anti-corruption, among many, is favored. Companies who work with vendors and partners who follow ethical standards and code of conduct are also shining examples. Leadership topics such as balanced representation on the board are also critical to investors, which helps in building trust with our stakeholders,” she said.
With True Corporation’s stock price up over 100% since January 1st, Ms. Naureen seems to be building that trust at a record pace. And as investors increasingly prioritize sustainability, True Corporation’s robust ESG framework should continue to attract and retain investment, fostering a resilient telecom-tech leader.
